PIRAEUS BANK CORPORATE RESPONSIBILITY …/media/Com/2015/Files/...Athens, May 2015 The 2014 Corporate Responsibility Report of Piraeus Bank was printed on Munken Polar paper, obtained

PIRAEUS BANKCORPORATERESPONSIBILITY REPORT2014

The collection and presentation of the content in the 2014 Corporate Responsibility Report are the product of the work of all unitsof Piraeus Bank and its subsidiaries in Greece and abroad.

Concept & Design: MNPPhotography & Photo Editing: Marios Theologis - Math StudioActualization, Layout & Production Management: EZ-dotPrinting: Pressious Arvanitidis

Athens, May 2015

The 2014 Corporate Responsibility Report of Piraeus Bank was printed on Munken Polar paper,obtained by environmentally-friendly processes.

The Forest Stewardship Council® (FSC®). Its mission is to promote environmentally responsible, socially beneficial and economically viable management of the world’s forests.

The 2014 Corporate Responsibility Report of Piraeus Bank is available online at:www.piraeusbankgroup.com/en/investors/financials/annual-reportsand as an iOS & Android tablet Application at “Piraeus Group Kiosk”.

Hard copies of the Report are available upon request to the Business Planning & IR Group:4, Amerikis Str., GR-105 64, Athens, T: +30 210 [email protected]

Last update of Piraeus Bank Corporate Responsibility Report: May 6, 2015

While it is interesting to gaze at the top, it is even more interesting to observe what leads to it. Which are those elements that arecombined to form the road to success? How do they balance together, who places them, how do they interact; what handlings are needed, how many people, how much flexibility, how much dynamism, how much inspiration? Because every peak is the result, the conclusion of many little things that compose the big picture;that compose the big bank. If one looks closely, one will see thateven the shape of number 1 is not random; that it is characterized by a line based on a dash. Rise high and reach a small peak.Or a big one.

Piraeus Bank - 2014 Corporate Responsibility Report 4

5Piraeus Bank - 2014 Corporate Responsibility Report

PIRAEUS BANK’S POSITIONIN THE CURRENT BUSINESSENVIRONMENT

Piraeus Bank, in its role as the largest systemic bank in Greece, deals with the challenges of 2015 with a particular sense of responsibility and sets priorities. The Group’s key priorities are enhanced liquidity, ensuring capital adequacy, the most effective possible management of loans in arrears by means of innovative methods and tools, further improvement of operating costs, return to profitability as well as preservation and enhancement of the quality of customer service.

Piraeus Bank unfalteringly supports the efforts towards restoring the Greek economy while also promoting initiatives aimed developing entrepreneurship and promoting competitiveness. In this direction, the Bank will continue to move ahead with all its strength in 2015 as well.

CHAIRMAN’SNOTE


CHAIRMAN’SNOTE

2014 was a year of stability for the Greek economy, which is undergoing a period of significant challenges. Whether these positive signs in 2014 will lead to a more permanent economic recovery in a particularly competitive international environment, will depend on the ability to adapt to the new prevailing conditions.

At Piraeus Bank, we address these challenges with a strong sense of responsibility and determination, promoting a spirit of cooperation and taking actions in order to support:

- our 161 thousand shareholders, by strengthening the structures and transparency in corporate governance matters;

- our 6 million customers, according to their specialized needs and demands;- the Group’s 21 thousand employees, by ensuring a working environment

which provides a balance between professional and personal equilibrium and encouraging their constant development;

- our suppliers, our business partners and social partners, on a basis of mutual benefit and harmonious collaboration;

- the reorganization and restructuring of sustainable sectors and businesses aimed at enhanced productivity and strengthened competitiveness of the Greek economy;

- the liquidity needs of the Greek primary sector, by supporting Greek agriculture;- the environment, through our active support of green entrepreneurship, our

constant reduction of the environmental footprint from the Group’s operation, implementation of programmes related to the protection of biodiversity and by addressing the climate change risks;

- corporate responsibility actions, by systematically fostering the Bank’s relations with all stakeholders, with particular emphasis on the preservation of culture, traditional technologies and industrial heritage in the Greek periphery, through the Piraeus Bank Group Cultural Foundation (PIOP) Museum Network; and

- the principles of the UN Global Compact for the protection of human and labour rights, the environment and the efforts to eliminate corruption.

In this Report, we present the corporate responsibility principles that we apply the specific actions and results of 2014, as well as the targets we have set. Piraeus Bank Group has been implementing the Global Reporting Initiative G4 guidelines for the 8th consecutive year, believing that this model defines a clear framework of principles that facilitates the disclosure and communication of corporate responsibility issues for both the Bank itself and all stakeholders.


It is our priority to provide support to our customers, our shareholders, the Group’s employees as well as all our social partners. Piraeus Bank Group’s basic principles of trust, consistency, solidarity and collectiveness are the guidelines for our business activities.

Michalis Sallas Chairman of the Board of Directors

CONTENTS

INFORMATION REGARDING THE CONTENT

OF THE 2014 CORPORATE RESPONSIBILITY REPORT 16

INDEPENDENT ASSURANCE STATEMENT 22

SELECTED FIGURES ASSOCIATED WITH

2014 CORPORATE RESPONSIBILITY REPORT 30

CORPORATE RESPONSIBILITY PRINCIPLES 34

PARTICIPATION IN GLOBAL INITIATIVES AND

HARMONISATION WITH INTERNATIONAL STANDARDS 36

STAKEHOLDERS’ DIALOGUE 40

CORPORATE GOVERNANCE 48

CUSTOMER AND SUPPLIER RELATIONSHIPS 68

HUMAN RESOURCES 86

SOCIETY, CULTURE AND THE ENVIRONMENT 108

APPENDIX: GRI INDEX AND ISO 26000 157

INFORMATION REGARDING THE CONTENT OF THE 2014 CORPORATE RESPONSIBILITY REPORT


INFORMATION REGARDING THE CONTENT OF THE 2014 CORPORATE RESPONSIBILITY REPORTThe present Corporate Responsibility Report covers the calendar year 2014 and forms part of the Piraeus Bank Group Annual Report, the content of which pertains to all Group activities.

The Corporate Responsibility Report aims to provide complete and symmetric presentation of certain important non-financial aspects of the organization’s work in relation to its administrative structure, its customers, suppliers, employees, society and the environment. It also serves the purpose of gradually and fully implementing the corporate responsibility principles already in effect at Piraeus Bank to all group subsidiaries as well as extending the relevant know-how required.

Abiding by the global, reliable and objective standards of Sustainability Reports

The Report is structured with the aim of conforming to the Guidelines of the Global Reporting Initiative G4 (GRI-G4) to determine its content (Materiality, Stakeholder Dialogue, Viability Sustainability Context, Completeness), the report-writing guidelines (Balance, Clarity, Accuracy) and the method of reporting data (Timeliness, Comparability, Reliability).

Piraeus Bank Group has been implementing the Global Reporting Initiative guidelines for the 8th consecutive year, believing that this model defines a clear framework of principles that facilitates the disclosure and communication of corporate responsibility issues for both the Bank Group itself and all stakeholders.

The Table of Global Reporting Initiative (p. 158-163) contains all the information for the key GRI G4 indices required for the basic level “In Accordance - Core”, as well as the corresponding indices of financial supplement (G4 Sector Disclosures: Financial Services).

The Group has also been abiding by the International Standard Guidelines for Social Responsibility ISO 26000 (p. 164-166) with the aim of strengthening and optimally


incorporating social responsibility into the Organization’s values and principles. This international standard contains guidelines for implementation and promotion of the basic principles of corporate responsibility in a company’s activities, in key issues such as: corporate governance, human rights, labor practices, the environment, fair operating practices, consumer issues and participation in and growth of society.

Piraeus Bank Group voluntarily follows the directions for the publication of annual and progress reports as indicated by the UN Global Compact, and posts its Annual Report on the relevant website (www.unglobalcompact.org).

The present Piraeus Bank Group Report has been assured by Ernst & Young. The detailed Independent Assurance Statement is included in pages 22-25 of the present Corporate Responsibility Report.

Collection and Processing of Corporate Responsibility Report data

For the collection and processing of the 2014 data, electronic database management systems were applied and internal processes have been adopted to ensure the validity and reliability of information.

The 2014 Corporate Responsibility Report aims to cover all Group activities; however, some of the data reported and quantitative measurements are focused on specific areas of its activities. Wherever this applies, reference is made to the relevant Report sections.

Dialogue with stakeholders and promotion of Corporate Responsibility issues

Communication and dialogue with stakeholders constitutes a strong tool for promoting related to Corporate Responsibility. By adopting this mechanism, one can distinguish those CSR issues that have the most substantial and timeless effect on society. These issues constitute the basis for the development and activation of mechanisms for sustainable improvement of an organization’s operations.

Towards this direction, in 2014 as well, apart from the regular communication and collaboration framework that has been established with each group of stakeholders, as described in the present Report, Piraeus Bank has also adopted an evaluation process by means of a survey-questionnaire in order to define and record current related to Corporate Responsibility Issues based on principles of Materiality, Stakeholder Dialogue, Viability Sustainability Context and Completeness. In this, participants were asked to assess an extensive range of corporate responsibility issues on a standardized scale the level of materiality (from 1= very low to 5= very high). The questionnaire was addressed to an extensive sample of 202 participants, both internally and externally of the Group.

please refer to: materiality questionnaire,www.piraeusbankgroup.com/en/investors/financials/annual-reports

Materiality survey based on questionnaire

The 22 issues were assessed, relating to interested parties (customers, employees) and to society as a whole (the environment, culture). Through this process, the 22 issues have been ranked based on their materiality, with participants noting areas of improvement and/or changes, which will be taken into consideration by the Group.


The issues incorporated in the survey’s questionnaire constitute aspects of corporate responsibility which may possibly have a positive or negative effect on stakeholders such as customers, employees, NGO’s. These issues have emerged from Piraeus Bank’s systematic communication with the interested parties and are defined by the actuality, the current economic crisis conditions, existing corporate responsibility practices as well as surveys and corporate responsibility indices pertinent to the Bank. All material issues might change over time, as does what we know about them, and new issues may arise. Piraeus Bank re-evaluates their materiality once a year, in the context of compiling the Annual Report.

From the analysis of the survey results it was concluded that each category of respondents has a different perspective on each issue. This parameter was taken into account to prevent the exclusion of any issue as immaterial; however, from the weighted average of all respondent categories and of total survey questions, the following 7 issues are distinguished in order of materiality, and are presented in more detail in this Report. In addition, for each one of the 7 issues assessed, it has been determined the aspect boundary and also if it is material only within the Piraeus Bank Group or outside, or both. Specifically:1. Customer Service (question Q1): Fair service/handling of customers, which includes management of their personal data in compliance with the relevant laws, promotion of products and services in an honest manner, as well as ensuring that all the products are safe, whatever their origin. Aspect boundary: within and outside Piraeus Bank Group, Customers, Suppliers, Market and Institutions level.2. Customer Satisfaction (question Q3): The Bank must ensure its compliance with the product promotion regulations and the banking code of ethics by applying proper policies, mechanisms for re-evaluation of procedures and practices, and employee training programmes. Customer relations can be further enhanced by adopting effective response procedures to bank request feedback as well as by monitoring the rate of customer satisfaction and setting improvement targets. Aspect boundary: within inside and outside Piraeus Bank Group, Customers, Suppliers, Market and Institutions.3. Measures to support the reorganizing and restructuring of sustainable sectors and businesses (question Q6): Piraeus Bank deals with the present challenges with a strong sense of responsibility, by promoting a spirit of collaboration and taking measures in order to support the reorganizing and restructuring of sustainable sectors and businesses, with the aim of enhancing productivity, competitiveness and employment. Aspect boundary: within and outside Piraeus Bank Group, Customers, Suppliers and Market level.4. Support of local communities through the Piraeus Bank Group Cultural Foundation (PIOP) (question Q21): Support of employment and of the economic activity of local communities. Aspect boundary: within and outside Piraeus Bank Group in Greece, Local Communities, NGO’s, Suppliers, Institutions, Greek Ministry of Culture and Education and Cultural Institutions level.5. Adoption of uniform Group culture (question Q8): Creation and diffusion of a uniform Corporate Culture within the Piraeus Bank Group, following the recent acquisitions of ATEbank, Geniki Bank, Millennium Bank and the Greek branch network of the Bank of Cyprus, CPB and Hellenic Bank. Aspect boundary: within and outside Piraeus Bank Group, Customers, Market and Institutions level.6. Reduction of the environmental impact from the Bank’s operation (question Q14): Adoption and implementation of an Environmental Policy aimed at reducing the impact of the Bank’s operation on the environment. Aspect boundary: within and outside Piraeus Bank Group, Local Communities, NGO’s, and Suppliers level.7. Business initiatives for the protection and enhancement of biodiversity and ecosystems (question Q15): To support sustainable business initiatives to protect and enhance biodiversity and ecosystems. Aspect boundary: within Piraeus Bank and the Piraeus Bank Group Cultural Foundation (PIOP), Employees level and outside these Local Communities, Public Institutions, NGO’s, Suppliers, European Commission and LIFE-Stymfalia project Stakeholders level.


The first chart below depicts the materiality report results of the sample survey regarding the 2014 Corporate Responsibility Report. The horizontal axis represents how Group stakeholders and participants perceive the materiality of each issue and the vertical axis represents the evaluation given by Piraeus Bank Group.

The second chart displays the the classification of material issues based on both the overall level of materiality and the individual ones.

Questions and views on the Report and its content may be submitted at:[email protected].


Q11 Employee volunteerism for society, the environment, culture

Q12 Retirement Scheme (Sabbatical Plus)Q13 Support of strategic goals through trainingQ14 Reduction of the Bank’s impact on the environmentQ15 Business initiatives for the protection and enhancement

of biodiversity and ecosystemsQ16 Climate changeQ17 Adoption of environmental management programmesQ18 Environmental education of Group employeesQ19 Preservation/ Promotion of cultural heritageQ20 Creation of Museum NetworkQ21 Support of local communitiesQ22 Culture-promoting research programmes

MATERIALITY ANALYSIS

3.0

3.0

4.0

4.0

4.5

4.5

5.0

5.0LOW

LOW

HIGH

HIG

H

MEDIUM

MED

IUM

3.5

3.5

STAKEHOLDERS

PIR

AEU

S B

AN

K G

RO

UP

Q1

Q3

Q21

Q6Q8

Q9Q19

Q13 Q17

Q4

Q5

Q10

Q20

Q16, Q18

Q14Q15

Q11Q7

Q22

Q12

Q2

Q1 Customer serviceQ2 Continuous improvement of products/services to benefit

customersQ3 Customer satisfactionQ4 Management of adverse consequences of products/servicesQ5 Enhancement of level of customers’ banking literacyQ6 Measures taken to support the reorganizing and

restructuring of sustainable businesses and sectorsQ7 Supplier relations managementQ8 Adoption of uniform Group cultureQ9 Employee flexibility and adaptability programmesQ10 Youth employability. Support of NGOs of youth entrepreneurship


CLASSIFICATION OF MATERIAL ISSUES

Q15 Q15

Q14Q14

Q21

Q21 Q8

Q8

Q15

Q6

Q14

Q21

Q3

Q1

Q8

Q3

Q3 Q6

Q6

Q1Q1

55 533 344 400 011 122 2

4.294.23

4.344.28

4.454.32

4.614.37

4.03

4.16

4.17

4.29

4.35

4.57

4.22

4.634.41

4.654.49

4.764.67

MATERIALITY WITHIN PIRAEUS BANK GROUP

TOTAL MATERIALITY MATERIALITYFOR STAKEHOLDERS


INDEPENDENT ASSURANCE STATEMENTTHIS STATEMENT HAS BEEN TRANSLATED FROM THE GREEK ORIGINAL VERSION

TO THE MANAGEMENT OF PIRAEUS BANK S.A.

The “2014 Corporate Responsibility Report” (“the Report”) of Piraeus Bank S.A. (“the Bank”) has been prepared by the Bank’s Management which is responsible for the collection and presentation of the information contained therein. Our responsibility is limited in carrying out a limited assurance engagement on specific scope on the Report, which is prepared in accordance with the “In accordance - Core” option level of the GRI G4 Sustainability Reporting Guidelines.

Our responsibility in performing our assurance engagement is solely to the management of the Bank and in accordance with the terms of reference agreed between us. We neither accept nor we assume any responsibility and for any other purpose to any other person or organization. Any reliance any third party may place on the Report is entirely at its own risk.

WORK SCOPE AND CRITERIA

The assurance engagement has been planned and performed in accordance with the International Standard on Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE3000), in order to provide a limited level assurance opinion on:1. The accuracy and completeness of quantitative data and the plausibility of qualitative information

related to the GRI G4 General Standard Disclosures, required for the “In accordance – Core” option.2. The accuracy and completeness of quantitative data (performance indicators) and plausibility of

statements (GRI G4 Disclosures on Management Approach – GRI G4 “DMA”) related to the GRI G4 Specific Standard Disclosures, which correspond to the seven (7) most material issues, as presented in the Bank’s materiality analysis.

3. The Report’s “In accordance – Core” adherence against the related GRI G4 requirements.

The GRI G4 General and Specific Standard Disclosures under the scope of our engagement are indicated in the Report’s GRI G4 Content Index, found on pages 158-163.

ERNST & YOUNG (HELLAS)Certified Auditors – Accountants S.A.8B Chimaras street, Maroussi151 25 Athens, Greece

Tel: +30 210 2886 000Fax:+30 210 2886 905ey.com


WHAT WE DID TO FORM OUR CONCLUSIONS

In order to form our conclusions we performed (but were not limited to) the steps outlined below: Performed interviews with Management executives in order to understand the Bank’s corporate

responsibility processes, policies and activities during the reporting period. Reviewed information in order to substantiate data and statements regarding the Bank’s

sustainability performance during 2014, as these are presented in the Report. Reviewed the Bank’s processes for determining material issues to be included in the Report,

the coverage of these material issues within the Report, as well as material issues covered by media, and sustainability reports of selected peers.

Interviewed specialists responsible for managing, collating and reviewing data related to the GRI G4 General and Specific Disclosures under the scope of our engagement, for internal and public reporting purposes.

Reviewed data reported to corporate level from the reporting entities (branches and management buildings) or from the Group’s subsidiaries, to test completeness of coverage (depending on assigned boundaries) of reporting entities and to examine for selected reporting entities the checks which have been applied at corporate level.

Reviewed relevant documentation and reporting systems, including collation tools, templates used, and guidance documents.

Reviewed the Report for the appropriate presentation of the GRI G4 General and Specific Standard Disclosures under the scope of our engagement, a procedure which also included discussions about limitations and assumptions relating to the way data are presented.

Reviewed the GRI G4 Content Index found on pages 158-163 as well as the references included therein, against the GRI G4 requirements for the “In accordance – Core” option.

LEVEL OF ASSURANCE

Our procedures were designed in order to obtain a limited level of assurance (as set out in ISAE 3000) on which we formed our conclusions. The extent of these procedures is less than those designed to obtain a reasonable level of assurance and therefore a lower level of assurance is obtained.

LIMITATIONS OF OUR REVIEW

Our review was limited to the Greek version of the Report. In the event of any inconsistency in translation between the English and Greek versions, as far as our conclusions are concerned, the Greek version of the Report prevails.

Our review was limited to information related to the GRI G4 General and Specific Standard Disclosures under the scope of our engagement, and did not include financial data nor the corresponding narrative text in the Report.

We do not provide any assurance relating to future information such as estimates, expectations or targets, or their achievability.

The scope of our work did not include any review of third party activities or performance, nor attending any stakeholder engagement activities. In addition, it did not include any review of the accuracy of survey results assigned to third parties, nor Information


Technology systems used by third parties, but was instead limited to the proper transposition of the final survey results –under the scope of our engagement- to the Report. Our review did not include testing of the Information Technology systems used or upon

which the collection and aggregation of data was based by the Bank.

CONCLUSIONS

Based on our review and according to the terms of reference and the limitations of our work, we report the following conclusions. Our conclusions are based on the appropriate application of the selected criteria and should be read in conjunction with the “What we did to form our conclusions” section above. 1. How complete and accurate are the quantitative data and how plausible is the qualitative information related to the GRI G4 General Standard Disclosures under the scope of our engagement? Nothing has come to our attention that causes us to believe that any reporting unit or

Group subsidiary company, according to the set boundary and time period stated in the Report, is not included in the quantitative data of the Report related to the GRI G4 General Standard Disclosures under the scope of our engagement.

Nothing has come to our attention that causes us to believe that errors or inaccuracies exist in the collation of the quantitative data related to the GRI G4 General Standard Disclosures under the scope of our engagement, or in the transposition of these data to the Report, that would materially affect the way they are presented.

We have reviewed information and explanations on selected Management statements (qualitative information) related to the GRI G4 General Standard Disclosures, as these are presented in the Report, for which no misstatements came to our attention.

Nothing has come to our attention that causes us to believe that the Group’s materiality analysis, as found on pages 17-21, is inaccurately presented based on the procedures followed by the Bank. Moreover, we believe that the use of probability sampling methods would have strengthened the stakeholder survey results conducted by the Bank, in the context of the prioritization of material issues.

2. How complete and accurate are the quantitative data (performance indicators) and how plausible are the statements (GRI G4 Disclosures on Management Approach) related to the GRI G4 Specific Standard Disclosures under the scope of our engagement? Nothing has come to our attention that causes us to believe that any reporting unit or Group

subsidiary company, according to the set boundary per material issue and the time period stated in the Report, is not included into the quantitative data (performance indicators) of the Report related to the GRI G4 Specific Standard Disclosures under the scope of our engagement.

Nothing has come to our attention that causes us to believe that errors or inaccuracies exist in the collation of the data related to the GRI G4 Specific Standard Disclosures under the scope of our engagement, or in the transposition of these data to the Report that would materially affect the way they are presented.

We have reviewed information and explanations on selected Management statements (GRI G4 Disclosures on Management Approach) related to the GRI G4 Specific Standard Disclosures, as presented in the Report and no misstatements came to our attention.

3. Does the Report meet the GRI G4 requirements of the “In accordance – Core” option? Based on our review, nothing has come to our attention that causes us to believe that


the Report does not meet the requirements of the “In accordance – Core” option, as presented in the GRI G4 Content Index, found on pages 158-163.

INDEPENDENCE

This is the third year that Ernst & Young (Hellas) Certified Auditors Accountants S.A. provided independent assurance services in relation to the Bank’s Corporate Responsibility report. We conducted our engagement in compliance with the requirements of the IFAC Code of Ethics for Professional Accountants, which requires, among other requirements that the members of the engagement team, as well as the assurance Firm, are independent of the client, including not being involved in writing the subject under review. EY has systems and processes in place to monitor compliance with the Code and to prevent conflicts regarding independence. The Firm and all professional personnel involved in this engagement have met these independence requirements.

ASSURANCE TEAM

The professionals which participated in the engagement are members of and are supported by the EY Climate Change and Sustainability Services Global Network, which undertakes similar engagements in Greece and at a global level.

Athens, 28 May 2015

For and on behalf ofERNST & YOUNG (HELLAS) Certified Auditors Accountants S.A.

Vassilios Kaminaris

SELECTED FIGURES ASSOCIATED WITH THE 2014CORPORATERESPONSIBILITY REPORT


5,800,000ACTIVE CUSTOMERS

91%CUSTOMER SATISFACTION INDEX (GREECE)Of Total Respondents Customers

1,142,412TRAINING MAN-HOURS

Piraeus Bank Group Human Resources

21,244EMPLOYEESPiraeus Bank Group Human Resources

146ACTIONSVolunteerism

6,742VOLUNTEERSVolunteerism

161,000SHAREHOLDERS

SELECTED FIGURES ASSOCIATED WITH CORPORATE RESPONSIBILITY

0.9%OF THE GROUP’S RECURRING OPERATING EXPENSES FOR FY 2014Contribution to Social, Cultural and Environmental Actions, Programmes and Initiatives


SELECTED FIGURES ASSOCIATEDWITH THE 2014CORPORATERESPONSIBILITY REPORT

THE ENVIRONMENT

Environmental Management System - With more than 800 building infrastructures (totaling 580,000 m2) and over 1,000 employees

directly involved, Piraeus Bank is one of the largest organizations to have received the required EMAS1 environmental certification for the Environmental Management System it applies.

- Over 870 tonnes of paper delivered for recycling in 2014

Environmental Risk and Opportunities- Consistent with the strategy on climate change that was adopted during

the LIFE climabiz project, Piraeus Bank undertakes actions to deal with the environmental – climate risk, such as the updating and upgrading of the Climate Risk Management Model, thus aiming to further utilize it in the Bank’s credit policy while also creating opportunities for mitigation of the relevant risk and for adaptation for both its customers and the Bank itself.

Biodiversity and the Environment- One year of actions towards restoration and sustainable management of Lake

Stymphalia, in the framework of the EU co-funded LIFE-Stymfalia project.

LIFE-Stymfalia: With this project, Piraeus Bank leads the path by introducing the concept of “business and biodiversity” in the operation of a banking institution for the first time in Greece.

1 Eco-Management and Audit Scheme.


In 2014, the following were implemented:- Completion of :

· the Management plan for the wetland·· the first phase of the Feasibility Study regarding exploitation delete words of the

biomass from reeds and substitute with: agricultural residues from the broader region.- Contact with the local community and authorities as well as commencement of

activities of the Local Management Unit.

Piraeus Bank Carbon Footprint- 5% annual reduction of electricity consumption per square meter.- 2% annual reduction of total CO

2 emissions per square meter.

Energy and Water Saving Actions- In 111 branches that were renovated, actions were undertaken aimed at the

reduction of energy and water consumption.

Green Banking- 20,219 Green Banking customers at the end of 2014.- 862 MW was the total capacity by RES projects funded by Piraeus Bank in 2014,

preventing the emission of over 1,505 tonnes of CO2 into the atmosphere.

- Approx. 7,000 jobs were created and preserved through targeted Green Banking loans in the 2010-2014 period.

CULTURE

Museum Network- 7 Thematic museums operating at select sites in the Greek regional areas (Soufli,

Dimitsana in Arcadia, the Island of Lesvos, the Island of Tinos, the mountainous region of Korinthia,Volos, Sparta) which were the result of an extremely successful paradigm of cooperation between the public and private sector in constructing and operating these museums .

- 129,796 visitors in 2014, 68% of which free of charge.- 2 museums under preparation: The Chios Mastic Museum on the island of Chios,

the Silversmithing Museum of Ioannina.

Historical Archive- Enrichment of PIOP’s Historical Archive collections by 50%.- Restructuring and modernization of structures and infrastructures (international

certifications).- Operation of Historical Archive as a multi-purpose cultural center for multiple recipients .- Increase by 100% of research requests.

Library- Incorporation of former ATEbank library.- Expansion of thematic titles with emphasis on the environment.

Collaboration with Local Communities- Participation in the Local Plans for Employment (TOPSA) in Arcadia, Nemea and

Corinth aiming at a closer collaboration with the local communities.


Collaboration with Piraeus Group’s Environment Unit- Energy upgrading and certification by EMAS of the Foundation’s Museums.- Development of common actions with Piraeus Bank’s Environment Unit. Joint

implementation of the LIFE-Stymfalia Programme aimed at the sustainable management of Lake Stymfalia.

Cultural Actions and Educational Programmes- 17 exhibitions.- 85 cultural actions.- 12 standard educational programmes.- 62 anniversary educational programmes for minors and adults.- 32 event cycles (art workshops, seminars, screenings) under the thematic axis

“Museums as Daily Public Places”. 6 of the event cycles were organized in all of the Network’s Museums.

- “Pausanias 2.0: From the School to the Museum”. Implementation of the educational programme “Cultural Landscapes”. New activity under this theme.

- Cultural Landscapes: Organization of an International Conference on “Cultural Landscapes in Natura 2000 sites”. A new research axis.

Scientific Support- To the academic and research community and various research bodies.- To the Hellenic Ministry of Culture, Education and Religious Affairs programme for

promotion of Greece’s Intangible Cultural Heritage (UNESCO). PIOP by UNESCO as an advisory body on matters of intangible cultural heritage.

- Training of young scientists.

Dissemination of publications- 1,877 volumes of PIOP publications were donated to libraries, social bodies and

organizations.- 165 educational folders were provided to schools.- 1,609 volumes (14 titles) of PIOP publications were provided as university

textbooks at significantly lower price.

Contribution to the Shaping of Cultural Policies- Participation of PIOP executives in national and international scientific and

educational bodies.


CORPORATE RESPONSIBILITY PRINCIPLES

Corporate Responsibility is the means by which businesses voluntarily incorporate social and environmental concerns into their business activities and in their interaction with other stakeholders. It regards the actions of businesses over and above their legal responsibilities towards society and the environment2.

Piraus Bank is committed to including social, environmental, and cultural actions in business practices and assumes initiatives over and above the legal obligations with the aim of enhancing social welfare and progress.

1. CORPORATE GOVERNANCE OPTIMISATION

- Transparency in governance and operational structures procedures.- Adoption and realisation of best practices of governance and operation.- Symmetric and systematic information dissemination to the investment and business

communities, media and NGOs.- Transparency in business partner and supplier evaluation and selection procedures.

2. ALIGNMENT OF BUSINESS TARGETS WITH SOCIAL PROGRESS AND SOLIDARITY

- Effective customer service before and after product and service sales, with emphasis on the Bank’s consulting role.

- Strengthening of entrepreneurial initiatives with the aim of promoting competitive fields with potential and prospects for growth.

2 EUROPEAN COMMISSION, A renewed EU strategy 2011-14 for Corporate Social Responsibility, 25.10.2011.


3. ADOPTION OF BEST WORKPLACE PRACTICES

- Development of a humane and responsible organisation, where competent, committed and inspired employees work collectively to lead the market through diversity , innovate by adding value and ensure the prosperity and sustainable development of the Group.

4. HARMONIOUS RELATIONSHIP WITH SOCIAL PARTNERS

- Returning part of the value generated by the Bank to its social partners within a strategically designed and systematic framework of social actions.

5. PROMOTION OF CULTURE

- Active contribution to the promotion of Greece’s cultural identity through the creation, operation and maintenance of the network of thematic technological museums of the Piraeus Bank Group Cultural Foundation (PIOP), which act as cultural focal points in the Greek regions, and by organizing scientific events and educational programmes for adults and minors.

- Continued implementation of research programmes and publications relevant to the purposes of the Piraeus Bank Group Cultural Foundation (PIOP).

- Safeguarding and highlighting of Piraeus Bank’s Historical Archive.- Provision of scientific advisory material to public and local community bodies and

support in shaping cultural policies.- Operation of a specialized library.

6. ENVIRONMENT PROTECTION USING NATURAL RESOURCES RESPONSIBLY AND SUPPORTING ENVIRONMENTALLY BENEFICIAL BUSINESS ACTIVITIES

- Systematic support of green entrepreneurship through comprehensive services to customers. The Bank’s main concern is developing and supporting a wide range of green products and services.

- Development of strategies to improve the Group’s environmental performance and reduce its operational environmental footprint.

- Development of innovative solutions for business and biodiversity.- Development of evaluation tools and procedures to manage climate change risk.- Support to individuals and enterprises and preparation of market to better adapt to

the effects of climate change.


PARTICIPATIONIN GLOBALINITIATIVES AND HARMONISATION WITHINTERNATIONAL STANDARDS

Piraeus Bank abides by the principles of sustainable development and actively participates in global initiatives and sustainability indices. Through these initiatives and based on international standards and practices, the Bank undergoes continuous evaluation and develops its corporate responsibility.

Piraeus Bank aims to continuously enhance its corporate responsibility and to promote its significance to the business and social environment.

GLOBAL INITIATIVES

United Nations Global CompactSince 2004, Piraeus Bank has been voluntarily participating in the UN Global Compact, actively supporting and promoting its principles, which pertain to human and labour rights, environmental protection and anti-corruption. The 10 Global Compact principles and the actions taken by Piraeus Bank in order to comply with these, are the following:


HUMAN RIGHTS

LABOUR

THE ENVIRONMENT

ANTI-CORRUPTION

1. Support, respect and protection of internationally proclaimed human rights within the businesses and their sphere of influence

2. Ensure that businesses have no complicity in human rights abuses

3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining

4. Elimination of all forms of forced and compulsory labour

5. Effective abolition of child labour

6. Elimination of discrimination in respect of employment and occupation

7. Support the precautionary principles in environmental challenges

8. Undertake initiatives to promote greater environmental responsibility

9. Encourage the development and expansion of environmentally-friendly technologies

10. Businesses should work against all forms of corruption, including extortion and bribery

- Full compliance of the Group with the relevant Greek and international legislation

- Implementation of the Group’s Human Right’s Policy

- 2014 Corporate Responsibility Report, Human Resources

- Full compliance of the Group with the relevant Greek and international legislation


- 2014 Corporate Responsibility Report, Society, Culture and the Environment

- Code of Conduct and Compliance Policy

- Relevant terms in employment contracts

- Labour Relations Framework

- Control mechanisms and procedures, and anti-money laundering information systems (including fraud detection)

- 2014 Corporate Responsibily Report, Corporate Governance


- Training programmes

BASIC PRINCIPLES IMPLEMENTATION METHOD DESCRIPTION OR REFERENCE TO THE 2014 CORPORATE RESPONSIBILITY REPORT


United Nations Environment Programme Finance Initiative (UNEP FI)Since 2007, Piraeus Bank participates in the United Nations Environment Programme Finance Initiative (UNEP FI), having signed the UNEP Statement of Commitment by Financial Institutions on Sustainable Development. In accordance with the Statement of Commitment, Piraeus Bank recognizes that economic development needs to be compatible with human welfare and a healthy environment and it has committed itself to taking into consideration protection of the environment, social responsibility and sustainable development in its business decisions.

UN Global Compact “Caring for Climate: The business leadership platform”The Bank has signed the UN Global Compact “Caring for Climate: The Business Leadership Platform”, which provides a framework for businesses to advance practical solutions and create public awareness on Climate Change issues.

The Hellenic Network for Corporate Social ResponsibilitySince 2007, Piraeus Bank has been a full member of the Network; its mission is to promote the notion of Corporate Social Responsibility and best practices applied in Greek businesses.

ISO 26000 Social ResponsibilitySince 2013, the Group has been abiding by the International Standard Guidelines for Social Responsibility ISO 26000, with the aim of strengthening and optimally incorporating social responsibility into the Organization’s values and principles. This international Standard contains guidelines for implementation and promotion of the basic principles of Corporate Responsibility in companies’ activities, in the following key issues: organizational governance, human rights, labour practices, the environment, fair operating practices, consumer issues and community involvement and development.

SUSTAINABILITY INDICES AND DISTINCTIONS

Dow Jones Sustainability IndexPiraeus Bank has been selected to be a constituent of the Dow Jones Sustainability Index Emerging Markets, following the RobecoSAM Corporate Sustainability Assessment. Piraeus Bank is the only company based in Greece to be included in the Dow Jones Sustainability Index, that tracks the performance of the top 10% of the 800 largest Emerging Markets companies that lead the field in terms of sustainability.

Carbon Disclosure Project (CDP)Since 2010, Piraeus Bank has been submitting to the CDP information concerning its environmental performance and the respective actions and initiatives. In 2014 the Carbon Disclosure Project rated with 90C the initiatives of Piraeus Bank aimed to tackle climate change, verifying that the Bank takes action in order to integrate climate risk and opportunity in its core business.

Sustainalytics3

The sustainability investment research firm Sustainalytics assessed Piraeus Bank’s actions regarding environmental, social and corporate governance issues and graded it 70 out of 100, ranking it 35th out of 226 banks assessed globally. With this grade, the Bank is characterized as “Outperformer” by Sustainalytics, clearly showing that the Bank’s corporate responsibility initiatives are significantly above average.

3 Assessment: September 12, 2014.


Οekom research AGThe rating agency oekom research AG rated the Bank’s performance regarding environmental and social issues with D+, thus recognizing its integrated approach to the implementation of the Environmental Policy and emphasizing the need for further integration of environmental and social factors into the Bank’s asset management.

Corporate Responsibility Index (CRI)In 2014, Piraeus Bank participated in the Corporate Responsibility Institute’s annual assessment, receiving the Platinum distinction for the 4th consecutive year.

Investors in People In 2009 and 2012, the Group’s Human Resources & Organizational Training unit received recognition as one of one of the first business units in Greece to receive the international “INVESTORS IN PEOPLE” certification. This certification is still valid at present, thus proving the Group’s unfaltering commitment to its decisive role of employer and the enhancement of its competitiveness and business performance through effective management and development of its employees.

HR Excellence AwardsIn 2014, the Group’s Human Resources & Organizational Training unit received two particularly significant distinctions in the framework of the HR EXCELLENCE AWARDS 2014, in the “Leadership” category. More specifically, the gold award in the category “Psychologically Healthy Working Environment” constituted recognition of the manner of implementation of the Employee Assistance Programmes (EAPs). Moreover, it received the silver award in the category “Managing Change. Cultural Change. Internal Communication; Mergers and Acquisitions” for the training of 6,720 employees that was undertaken in the framework of the mergers and acquisitions.


STAKEHOLDERS’ DIALOGUE

Piraeus Bank defines as stakeholders constituents whose actions directly impact or influence its long term course, its business activities and its position in society as well as those on whom the

Bank’s operations have a direct impact or influence.

INVESTORS

Cooperation Framework - Provision of precise information regarding the course and strategy of the Group

necessary to evaluate investment in Piraeus Bank.

Means of Communication – Cooperation- Disclosure of Financial Results (presentations, press releases, teleconferences,

internet).- Contact with the Management and the special Investor Relations unit (events,

meetings, teleconferences, roadshows).- Immediate response to individual requests by means of website and e-mail contact

form. Contact with the Shareholder Registry.- General Meetings of Shareholders.

CUSTOMERS

Cooperation Framework- Responsible information and provision of product and services with respect to the

code of business conduct and business ethics.

Means of Communication – Cooperation- 24h/7 Customer Call Centre- Branch network and alternative channels (ATMs, e-banking, mobile banking).

Customer Service-complaint handling procedure. - Seminars and informative meetings with customer groups. - Customer satisfaction survey at regular intervals.- Structured discussion between customers and the “Relationship Management


Service” for personalized organization and management of their finances.- Immediate response to individual requests by means of website and e-mail

contact forms.- Significant presence in social media - Voice of Customer programme: Tool applied for systematic and structured collection

and analysis of the customers’ experience with the Bank’s products and services.

INVESTMENT ANALYSTS

Cooperation Framework- Information regarding the course and strategy of the Group to evaluate investment in

Piraeus Bank shares or securities.

Means of Communication – Cooperation- Regular contact with Management and specialized Investor Relations Division

(presentations, meetings, teleconferences, roadshows). - Disclosure of Financial Results on quarterly basis (presentations, press releases,

teleconferences).- Communication of business developments (press releases).

BANKS

Cooperation Framework- Mutual Information sharing and collective representation in financial agencies.

Means of Communication – Cooperation- Contact and meetings with relevant units at each Bank.- Participation in legislative drafting or technical committees at an international, European

and national level.- Cooperation with foreign financial agencies and associations in the framework of bilateral

and multi-lateral collaborations.

BUSINESS COMMUNITY

Cooperation Framework- Mutual cooperation on a win-win basis.

Means of Communication – Cooperation- Regular dialogue and cooperation with Trade Associations, Commercial, and Industrial

Chambers. Participation in Seminars and other information events.

EMPLOYEES & THEIR FAMILIES

Cooperation Framework- Open Communication with employees and safeguarding their ongoing development,

fair treatment and rewarding.- Provisions for strengthening employee resilience in order to effectively manage the

challenges they face in all aspects of their lives.


- Employee sensitization and strengthening of dialogue regarding corporate responsibility issues.

Means of Communication – Cooperation- Internal network (Intranet – HR Portal).- Internal newsletter “winners” distributed to all Group employees.- Piraeus Bank Group Employee Culture and Satisfaction Surveys.- Open communication with all employees concerning staffing needs to offer

development and transfer opportunities.- Meetings/events.- Focus groups.- Training and development programmes.- Established procedure for employee performance review and competency appraisal.- Collective Representation.- Employee Assistance Programmes for employees and their families.- Volunteer actions with employee participation.- Employee- Volunteer Interest Survey.- Employee cultural sensitivity actions.

STATE-REGULATORY AUTHORITIES

Cooperation Framework- Group compliance with the regulatory framework.

Means of Communication – Cooperation- Ordinary and extraordinary communication with supervisory authorities.- Data provision, report compilation, meetings, participation in consultations.

LOCAL COMMUNITIES

Cooperation Framework- Supporting local actions.

Means of Communication – Cooperation- Operation of Museum Network on a national level (support to local economies, job

creation, collaboration with local suppliers)- Organizing/support of local social and cultural events/cultural tours and training

programmes at local level- Providing guidance for cultural development to third parties.

THE MEDIA

Cooperation Framework- Information, communication and promotion of corporate actions and products of the Group

Means of Communication – Cooperation- Press releases and conferences.- Communication through the Bank’s Press Office.- Social Media.


NON-GOVERNMENTAL ORGANIZATIONS (NGO’s)

Cooperation Framework- Supporting environmental and social actions.

Means of Communication – Cooperation- Synergies for common interest actions for society, culture and the environment.

Financial support of specific NGO’s actions.- Cooperation through volunteer actions and common European programmes.

SUPPLIERS/SERVICE PROVIDERS

Cooperation Framework- Cooperation on a win-win basis.

Means of Communication – Cooperation- Established procedures for supplier and service provider tendering, evaluation and

selection through outsourcing.- Seminars, information meetings and attendance of live material demonstrations for

large procurements of information systems, green supplies & procurement etc.

CREDIT RATING AGENCIES

Cooperation Framework- Information regarding the course and strategy of the Group to evaluate the credit

rating of Piraeus Bank.

Means of Communication – Cooperation- Regular communication and meetings with Management and relevant Bank units.- Delivery of financial data

CORPORATEGOVERNANCE


CORPORATEGOVERNANCE

Piraeus Bank Group applies the institutional framework of corporate governance, and the recently established regulations on corporate governance as stipulated by the provisions of the Law 4261/2014. Significant role in the corporate function of the Group has the integration of best governance principles in all its activities. At the same time, constant upgrading of the systems of: Governance, internal control, regulatory compliance, transparency and information dissemination towards the investment community constitute key concerns for the Group.

Piraeus Bank safeguards its corporate interests as well as the interests of its shareholders.

- Piraeus Bank has adjusted its Board of Directors’ (BoD) composition in order to comply with the applicable legislation pertaining to Executive, Non-Executive and Independent members. The description of BoD members as independent is based on the criteria set by Law 3016/2002 and the Greek banking regulatory framework. In all cases of independent candidate nominations by the BoD, the requirements of both the aforementioned Law and the regulatory framework are met. Moreover, both the legislation and the banking regulatory authority require particularly high skills/abilities and competence of the banks’ BoD’s both individually and collectively, some of which can only be acquired from extensive banking experience. The Bank has a BoD Member Candidate Nomination Committee, the aim of which is: a) the identification/location/recommendation of candidates in relation to BoD positions available and the approval of these by the BoD or the Annual General Meeting, b) the evaluation of the combination of the breadth of knowledge and experience per subject of Bod members, and c) the description of the individual skills and qualifications that it believes are required to fulfill the BoD member positions. The suitability of BoD members is evaluated by the ECB’s Single Supervisory Mechanism.

- The Audit Committee, comprised of non-Executive BoD members, which monitors and evaluates the efficiency and effectiveness of the Internal Control System at Parent and Group levels, based on the data and information provided by the Internal Audit Unit, and findings and remarks of the external auditors and regulatory authorities.

- The Risk Management Committee, which aims to cover all forms of risk (credit, market, operational), and ensure integrated risk control, expert risk management and the required coordination on individual and consolidated basis.


- The Corporate Governance and Board of Directors Secretary units, which are responsible for the development of Corporate Governance actions and programmes approved by the Management, and for the supervision of their implementation in the Bank and the Group’s companies in Greece and abroad, and the operational support provided to the BoD and its committees by applying Corporate Governance best practices.

- The Internal Corporate Governance and Operating Regulations Manual, which ensures transparency and symmetrical information, and encompasses issues which are not stipulated in the Bank’s Articles of Association but are indispensable for its smooth operation. It also has the Code of Conduct, which governs the obligations of the Group’s employees.

- The Group’s Internal Audit (Internal Audit Unit under Act 2577/2006 of the Governor of the Bank of Greece), which is independent, reports to the Board of Directors-through the Audit Committee-and the CEO of the Bank, and is responsible for Group-wide internal control.

- The Compliance Unit, which institutes and applies procedures and prepares the annual compliance programme in order to achieve the Group’s timely and permanent compliance with the effective regulatory framework, to ensure complete adjustment to the regulatory framework for preventing the involvement of the banking system in legalizing funds that originate from illegal activities and combating terrorism.

Investor Relations, Shareholder Registry and Corporate Announcements services, are entrusted with the task of informing investors, shareholders and appropriate regulatory authorities accordingly.

- In January 2013, Monitoring Trustees were appointed to all 4 systemic banks to monitor the implementation of the responsibilities arising from the state funds that the Bank received. At Piraeus Bank, the firm KPMG undertook the role of Monitoring Trustee.

- Piraeus Bank signed a Relationship Framework Agreement (RFA) regarding banks to which the Hellenic Financial Stability Fund (HFSF) holds limited voting rights (private sector participation equal to or above 10%), according to Law 3864/2010. The RFA regulates the relationship between the Banks and the HFSF, as well as the issues related, among others, to: a) the corporate governance of each Bank, b) the drafting and approval of Restructuring Plan, c) the important liabilities of the Restructuring Plan and changes to the voting rights by the HFSF, d) the monitoring of the Restructuring Plan materialization and the implied risk exposures for the Bank and e) the consensus rights of the Fund. It is noted that the Bank’s management will continue to independently determine the Bank’s business strategy and policy, according to the Restructuring Plan and the Bank’s management bodies continue to hold the responsibility for the day-to-day operations. Information regarding the aforementioned RFA is published according to the regulations of the Memorandum of Economic and Financial Policies (MEFP) on the HFSF internet site (www.hfsf.gr). It is duly noted that Piraeus Bank’s restructuring Plan received the approval of the European Commission in July 2014.

- On November 4, 2014, the ECB assumed responsibility for the supervision of banks in the Eurozone, with direct supervision of 120 important bank groups, including Piraeus Bank Group, representing 80% of total banking sector assets


in the EU. The Single Supervisory Mechanism (SSM) constitutes one of the three pillars of the European Banking Union (the other two being the Single Resolution Mechanism –SRM- and the Deposit Guarantee Scheme) and a new system in bank supervision, made up of the ECB and the relevant national authorities of the participating countries, whose basic aim is to contribute to the safety and soundness of banking institutions and to the stability of the European financial system by ensuring consistent performance monitoring.

For more details on implementation of institutional regulations & Corporate Governance practices, please refer to:Consolidated Annual Financial Report 2014>Corporate Governance Statement

SUPREME MANAGEMENT BODIES

The supreme body of Piraeus Bank is the Shareholders’ General Meeting, and inter alia is responsible for electing the Board of Directors, that manages and represents the Bank judicially and extrajudicially.

Piraeus Bank’s Board of Directors, which was elected by the Annual General Meeting of the Shareholders on May 16, 2014, for a three-year term (excluding the representatives of the HFSF and the Greek State) has the following composition at present, after changes (resignations, replacement of members), the formation of the BoD into a body and the appointment of executive and non-executive members, according to Law 3016/2002:

CHAIRMAN OF THE BOARD OF DIRECTORSMichalis G. SallasNon-Executive Member

NON-EXECUTIVE VICE CHAIRMENStavros M. LekkakosNicolaos M. Christodoulakis

INDEPENDENT NON-EXECUTIVE VICE CHAIRMANApostolos S. Tambakakis

EXECUTIVE MEMBERSAnthimos C. Thomopoulos, Managing Director & CEO Hariklia A. Apalagaki, Executive Director

NON-EXECUTIVE MEMBERSArgyro A. Athanasiou, Independent Non Executive Member Eftychios Th. Vassilakis, Non Executive MemberIakovos G. Georganas, Non Executive MemberStylianos D. Golemis, Independent Non Executive MemberChariton D. Kyriazis, Independent Non Executive MemberPetros A. Pappas, Independent Non Executive MemberVassilios St. Fourlis, Non Executive Member


THE APPOINTED REPRESENTATIVES PARTICIPATING IN THE BOD ARE:Ekaterini C.Beritsi, Representative of the Hellenic Financial Stability Fund, according to Law 3864/2010Gerasimos K. Tsiaparas, Representative of the Greek State, according to Law 3723/2008

For more details, please refer to:www.piraeusbankgroup.com>Investors>Corporate Governance

Board of Directors Committees Audit CommitteeRisk Management CommitteeRemuneration CommitteeBoard of Members’ Nomination CommiteeStrategic Planning CommitteeGroup Executive Committee

Main Executive and Administrative Committees and CouncilsSupervisory & NPL Management CouncilInformation Technology (IT) Planning and Operating Quality CommitteeSenior Credit CommitteeWorkout CommitteeAsset-Liability Management Committee (ALCO)Expenditure CommitteeCorporate Responsibility Committee

REMUNERATION POLICY

A remuneration policy has been established, as an integral part of the Group’s corporate governance, aimed at deterring from excessive risk-taking and at continually strengthening the Group’s values and long-term interests.

The remuneration policy, designed based on the framework of the Governor’s Act 2650/19.1.2012 of the Bank of Greece, of the subsequent provisions of Law 4261/2014 (regarding employee remuneration) and of EU Regulations No 450 and No 604/2014, is in accordance with the Group’s business strategy and supports its performance-driven culture, which aligns the organization’s goals with those of the interested parties, employees, management and shareholders.

The remuneration-defining procedures are clear, recorded and with internal transparency.

The Remuneration Policy is based on the following principles:- Maximization of performance.- Talent attraction and retention.- Alignment of remuneration and rewards with profitability, risk,

capital adequacy and sustainable growth.- Compliance with the regulatory framework.- Internal transparency.- Deterring from excessive risk-taking.


REMUNERATION COMMITTEE

The Remuneration Committee is responsible for regular reviews of the Group’s Remuneration Policy as well as for monitoring its implementation. The Committee is composed of Non-Executive BoD members, the majority of whom are independent, including the Chairman. The Committee takes into account the long-term interests of the shareholders, investors and interested parties of the credit institution; it is oriented towards long-term, prudent management of the institution and towards prevention or minimizing of conflict of interest situations which would be detrimental to this management.

The function and detailed responsibilities of the Committee are governed by its regulation framework. Its responsibilities include:

- Preparation of the decisions concerning remuneration, ultimately taken by the BoD, which should correspond to their authority, duties, specialization, performance and responsibilities and which have an effect on the institution’s risk-taking and management as well as monitoring the implementation of these decisions

- To ensure that during the evaluation of the mechanisms adopted to align the remuneration policy with risks undertaken, all kinds of risks along with the Bank’s liquidity and capital adequacy are taken into account.

- Ensuring the necessary advisory contribution of the supervised institution’s relevant units (Risk Management, Regulatory Compliance, Internal Audit, Human Resources, Strategic Planning) is provided for shaping, reviewing and consistently applying the remuneration policy, as well as for external experts – when deemed necessary by the BoD.

OTHER INVOLVED PARTIES

The Remuneration Policy is designed by the Group’s Human Resources with the participation of the Risk Management, Compliance and Internal Audit Units. It is submitted to the Remuneration Committee which in turn proceeds with any potentially necessary changes before submitting it to the BoD’s non-executive members for final approval.

The independent audit units contribute to the design of the Remuneration Policy; however, they are primarily involved with the Policy’s review and monitoring process, which is conducted at least once a year.

The non-executive members of the BoD could, if deemed necessary, collaborate with an external advisor. It is duly noted that no external advisor participated in the shaping/review of the Bank’s Remuneration Policy in 2014.

REMUNERATION STRUCTURE

Total remuneration may include variable components, apart from the fixed ones, in order to ensure a link between remuneration and long-term business effectiveness. In all cases, standard remuneration constitutes the greatest part of total remuneration.

Variable remuneration may be provided as reward for performance based on pre-defined qualitative and quantitative targets and are linked to the individual’s performance, their division, the Bank/Group and the long-term business targets. Indicative criteria that are assessed for payment of variable remuneration may include among other, profitability,


minimum capital adequacy, effectiveness, management of change, development of partnerships etc. Variable remuneration is paid or guaranteed only when they are acceptable based on the Group’s broader financial condition and on performance.

Evaluation of employees with control duties is not linked to the outcome of the processes/units audited by them.

In order to strengthen the link between variable remuneration and long-term Group targets, the award of variable remuneration is spread over time; the amounts awarded for both deferred and not deferred variable components, are not only paid in cash but in other instruments as well (e.g. shares).

CRITERIA FOR CANCELLATION/RETURN OF VARIABLE REMUNERATION

The Bank may cancel payment of deferred variable remuneration if specific performance indicators are not met. The same may apply if serious breaches in regulations/procedures are detected.

Moreover, if at a later date it is decided that the reasons for payment of this variable remuneration were wrong, the total deferred payment originally calculated may be cancelled.

If deceit or misleading of the Group concerning payment of variable remuneration is detected, the employee may be required to return it, with compliance to labor laws.

PRINCIPLE OF PROPORTIONALITY

The Bank applies the current regulatory framework based on the Principle of Proportionality, taking into consideration the Bank’s nature and size, its structure, complexity of activities etc.

REMUNERATION DISCLOSURE

The following tables provide quantitative information on remuneration of senior management and employees with significant impact on the Group’s risk profile, analyzed by business sector:

Investment Banking

Retail Banking

Asset Management

Support Operations

Independent Control Operations

Other Operations

REMUNERATION PER BUSINESS SECTOR (in thousands €)

TOTAL NUMBER OF EMPLOYEES PER BUSINESS AREA

16

94

1

48

31

9

TOTAL FIXED REMUNERATION1

2,007

10,056

11

5,465

1,801

462

TOTAL VARIABLE REMUNERATION

48

225

0

104

24

0


INTERNAL AUDIT SYSTEM

The Piraeus Bank Group has set up a strong Internal Audit System (IAuS) to ensure protection of its assets, the individual and detailed maintenance and safeguarding of its customers’ assets and to ensure the interests of its shareholders. It systematically monitors the efficiency and effectiveness of the existing System, promptly implementing the actions that may be required to constantly deal with and reduce risks as the IAuS aims to not only eliminate possible risks but also deal with them effectively and in a timely manner. At the same time, the Group applies early warning mechanisms to ensure consistent implementation of the IAuS in the Divisions as well as full compliance of all parties involved with the principles and targets of the System.

It is a priority for the Bank to develop and constantly upgrade the Internal Audit system, on both an individual and group level. Auditing mechanisms and procedures - which cover all activities and transactions and are conducive to the Bank’s effective and safe operation –are recorded in detail and constitute the IAuS.

Responsible for implementing the IAuS:1. The Internal Auditor 2. The Audit Committee 3. Internal Audit

In accordance with the effective statutory framework, the IAuS is supported by an integrated communication and Management Information System (MIS) as well as

TOTAL VARIABLE REMUNERATION, OF WHICH:

In cash

In shares

Financial means related to shares

Other means

TOTAL FIXED REMUNERATION

EMPLOYEE NUMBERS PER CATEGORY

EMPLOYEES WHO RECEIVED SEVERANCE PAYMENT

HIGHEST SEVERANCE PAYMENT AMOUNT PAID TO

AN INDIVIDUAL

TOTAL AMOUNT OF SIGN-IN PAYMENT

EMPLOYEES WHO RECEIVED SIGN-IN PAYMENT

DEFERRED REMUNERATION TO BE PAID AND

REDUCED BY ADJUSTMENTS

TOTAL DEFERRED REMUNERATION, OF WHICH:

Vested

Non-vested

EMPLOYEE REMUNERATION INCLUDED IN REMUNERATION POLICY (in thousands €)

BOD MEMBERS SENIOR MAANGEMENT2 EMPLOYEES WHOSE ACTIONS DIRECTLYIMPACT RISK PROFILE

424

-

-

-

112

9,824

-

157

-

-

-

-

-

-

-

-

-

35

7,811

-

-

-

-

-

-

-

400

-

-

-

199

19,800

-

132

-

-

-

-

-

¹ Including severance payment amounts due to Voluntary Exit Scheme (VES). The VES was implemented by Piraeus Bank Group and formu-lated according to general criteria. The Scheme was addressed to all employees in Piraeus Bank and its Greek subsidiaries, with indefinite term employment contracts and in-house lawyers. VES severance payments were not associated with risk assumption as per the the Bank of Greece Governor’s Act 2650/19.01.12. VES Scheme has been duly authorized by the Hellenic Financial Stability Fund (HFSF).

² Senior Management includes employees whose actions directly impact the Group’s risk profile.


mechanisms which complement each other and constitute an integrated audit system of the organisational structure and the activities and the Bank as well as of the Regulations.

The members of the Board of Directors have the ultimate responsibility for maintaining, monitoring and assessing the efficiency and effectiveness of IAuS. They assess IAuS annually and design the strategy for its improvement based on the relevant report submitted by the Bank’s Administration and on the Audit Committee’s report observations. The efficiency evaluation of IAuS on a Bank and Group level is assigned to external, non-regular, chartered auditors/accountants and takes place periodically and at least once every three years and following Audit Committee recommendation. The relevant evaluation report is made known to the Bank of Greece within the first six months of the year following the three-year expiry.

For more details on IAuS and Internal Audit, please refer to:Annual Financial Report 2014>Corporate Governance Statement


INTERNAL AUDIT

2014 ACTIONSThe Group’s Internal Audit is independent and reports to the Bank’s Board of Directors, through the Audit Committee and supervises and coordinates the activities of Internal Control units in the Group subsidiaries. Within this context, in 2014, the Group’s Internal Audit:

- Maintained its continual observation and monitoring of branch activities in Greece and subsidiary banks in Bulgaria, Romania, Albania, Ukraine and Serbia by means of the Regional Divisions’ Auditors , and in particular by developing scenarios of examination of related transactions.

- Continued the development of a data base using own resources aimed at electronic transaction tracing, the development of fraud identification and prevention “scenarios”, and at supporting the auditing work performed by Regional Divisions’ Auditors.

- Provided consulting in the development of specific Bank processes in order for them to incorporate proper auditing mechanisms.

- Participated in the development and conducting of specialized seminars on more effective operation of branches and combating fraud.

- Conducted the relevant monitoring of effectiveness and efficiency of the Internal Audit System and the Recovery Banking unit.

- Monitoring that corporate governance rules are being implemented with emphasis on monitoring of related party transactions, in accordance with the relevant requirements of the Bank’s binding RFA agreement with the HFSF.

- Continued training and further specialization of its resources, directing them towards appropriate professional certifications (CIA, CISA, CFE, CFSA etc.).

- Conducted internal training seminars for the new colleagues from the Greek operations of the Bank of Cyprus, Cyprus Popular Bank, Hellenic Bank and Millennium Bank aiming to more effectively incorporate them into the auditing activities and implementation of these in accordance with the Internal Audit’s processes.

2015 KEY TARGETSThe action plan for the Group’s 2015 Internal Audit, which aims to continuously perform its duties smoothly and successfully in order to strengthen IAuS operation in the parent Bank, as well as to Group subsidiaries in Greece and abroad, will place particular emphasis on the following, among others:

- Further developing scenarios of examination of related transactions and full integration of Bank subsidiaries in Cyprus and Egypt into the monitoring system.

- Further enhancement of the monitoring processes involved in the Anti-Money


Laundering system (AML) on a Greek Branch Network level. - Monitoring of effectiveness and efficiency of Recovery Banking Division’s Internal

Audit System as well as of compliance with the supervisory framework for the management of obligations regarding loans in arrears and non-performing loans (Executive Committee’s Act/BoG/42/30.05.14).

- Monitoring that corporate governance rules are being implemented with emphasis on monitoring of related party transactions, in accordance with the relevant requirements of the Bank’s binding RFA agreement with the HFSF.

- Application of quality assurance in audit processes at Group level. - Support the Management for more effective monitoring of findings that remain

pending.- Participation of Internal Audit executives of the Group as speakers at training sessions

targeted mainly at Branch executives and new employees, with the aim of informing them about risks assumed while conducting transactions. Moreover, in the framework of the Bank’s support towards the shaping of a common culture in the internal audit system of the expanded Piraeus Bank branch network, the Group’s General Division of Internal Audit has committed itself to participating in the transfer of the relevant know-how at the Bank’s Regional units’ meetings and in meetings to this aim both at a Manager and Branch Manager as well as at a total branch employee level.


EXTERNAL AUDITORS

According to the resolution of the General Meeting of Shareholders of Piraeus Bank made on 29.06.2014, the audit firm PricewaterhouseCoopers was chosen as Certified Auditors for Piraeus Bank’s stand alone and consolidated financial statements for 2014; specifically Mr. Dimitrios Sourbis (Reg. no. 16891) was appointed Regular Certified Auditor and Ms. Despina Marinou (Reg. no. 17681) as Substitute Certified Auditor. Certified Auditors may offer their services for a period of no more than four consecutive years and their reappointment may take place after the lapse of three consecutive years.

MANANAGEMENT INFORMATION

The role of the Management Information System (MIS) unit is to provide timely and reliable information to Management in relation to the Bank’s and the Group’s profitability and financial information, as well as to indicate the developments requiring corrective measures, thus facilitating decision-making and action-planning.

The provision of continuous and reliable information to the Bank’s Management and the other Business and Support units is targeted at operational quality improvement.

In 2014, the MIS unit contributed to the 2015 Budget Targets set according to the new Organizational Structures. At the same time, it continued to contribute to targeted requirements, related to the extraction of both Corporate Reports and Reports presenting the Bank to other organizations.

The last quarter of 2014 saw the commencement of the upgrading of the data processed by the unit, with the inclusion of an analytical dimension of customers as well as of the Arrangements they hold with the Bank. This significant upgrading allowed the unit to effectively support Management’s strategic decisions, the main one being the drafting of an RBU analytical monitoring report.

In conjunction with other Consulting firms, the Unit participated in all IT-related projects which commenced during the year. In brief, regular report-drafting can be classified as:- Daily, whereby developments in the Bank’s and the Group’s basic figures are reported, as are

any notable changes (support of EIS & Financial MIS in the Bank’s portal).- Weekly, regarding monitoring of pricing policy (average interest rates, spreads)

per customer category as well as achievement of branch targets.- Monthly, regarding product profitability and operating cost (ALCO support),

monitoring and analysis of specialized figures (approvals, loan modification progress, customer application progress) as well as coverage of special accounts receivable (eg Agricultural Sector).

- Quarterly analysis of profitability and of progress of the Bank and Group’s basic business sector turnover (summary published in financial statements).

- Quarterly analysis of Group volumes, profitability and indices.


COMPLIANCE

2014 ACTIONS- Appointment of a new Group Compliance Officer.- Management approved the new organizational structure of the Compliance unit, with

the creation of new responsibilities for more effective accomplishment of the heightened compliance requirements of the Bank.

- Successful consolidation of human resources stemming from Geniki Bank, with total Compliance employees now numbering 124.

- Extended inspection and examination of Bank units, Bank subsidiaries and companies on money laundering and terrorist funding and compliance with the regulatory framework in general, with parallel implementation of agreed corrective actions to mitigate regulatory risk.

- Completion of all necessary actions for compliance with the Foreign Account Tax Compliance Act (FATCA).

- Design of training material related to regulatory compliance issues, in collaboration with the Group’s Human Resources and Organizational Training.

2015 KEY TARGETS- Review of the Group Compliance Policy with the aim to incorporate the recent

amendments in the regulatory framework.- Completion of actions to inform customers and provision of the required information

to the appropriate Authorities in relation to the bilateral agreement between Greece and the USA.

- Ongoing monitoring and support of the Bank’s investment activities, in the framework of the Group Compliance’s new structure and operation.

- Upgrading of the AML system regarding monitoring of transactions, in relation to money laundering and terrorist funding.

- Completion of analysis to assess the quality of the control mechanisms in branch network on issues of regulatory compliance risk assessment.

- Conducting of special thematic controls at Bank units for timely identification of possible deviation from the regulatory framework.

- Continual training of Bank employees in anti-money laundering, terrorist funding and regulatory compliance.


The Group’s Compliance operates in the context of the “Basel III” supervisory framework and the relevant guidelines of the Bank of Greece. It is headed by the Group Compliance Officer, who is responsible for the Group’s Compliance Function. In accordance with the Bank’s organizational chart, the Group Compliance reports directly to the Managing Director & CEO and is accountable to the Group’s Internal Audit in terms of the adequacy and effectiveness of the compliance procedures. Moreover, the Group’s Compliance Officer reports to the Bank’s Audit Committee, by means of reports and updates mainly related to monitoring and assessment of its auditing work as well as to strengthening Internal Audit structures.

The Group Compliance has certified its processes according toISO 9001:2008 standards.

For further information regarding the Group’s Compliance Policy please refer to: www.piraeusbankgroup.com>Investors>Corporate Governance>Compliance

SHAREHOLDER RELATIONS

INVESTOR AND ANALYSTS RELATIONS

Investor information is provided to individual and institutional investors by the Business Planning and Investor Relations Division with the active involvement of the Top Management. Its purpose is to provide systematic and symmetrical information to individual and institutional investors regarding the course and strategy of Piraeus Group. During 2014, a total of 1,059 meetings/briefings were held with investors and analysts both in Greece and abroad, compared to 566 meetings/briefings held in 2013.

SHAREHOLDER REGISTRY

The Shareholder Registry is responsible for providing direct and symmetrical information to all shareholders, as well as assisting them in exercising their rights in accordance with the law and the Bank’s Articles of Association.

CORPORATE ANNOUNCEMENTS SERVICE

Corporate announcements are the responsibility of the Corporate Announcements Service. It was set up in accordance with Law 3016/2002 and the Capital Market Commission’s Board resolution no. 5/204/14.11.2000, and is responsible for the Bank’s compliance with the institutional framework of this resolution. The Bank’s announcements are sent immediately to the Hellenic Exchanges in order to be recorded in the Daily Official List and to inform the investors.

SHAREHOLDER STRUCTURE

Piraeus Bank is a multi-shareholder company with a shareholder base consisting of eminent representatives of the business world, local and foreign institutional investors and numerous private investors, as well as the HFSF after the recapitalisation which was concluded in June 2013.

In January 2015, the total number of Piraeus Bank’s shareholders was 160,490. Out of the total common shares (6,101,979,715 shares of nominal value €0.30 each) 67% was held


SHAREHOLDERS’ STRUCTURE i

i Data as of 9.01.2015

67%HELLENIC FINANCIAL STABILITY FUND

3%INDIVIDUAL INVESTORS

1%GREEK INSTITUTIONAL

INVESTORS

4%GREEK INSTITUTIONAL

INVESTORS

29%FOREIGN INSTITUTIONAL INVESTORS

TOTAL SHARES i TOTAL SHARES OF THE PRIVATE SECTOR

86%FOREIGN INSTITUTIONAL INVESTORS

10%INDIVIDUAL INVESTORS


by the HFSF and 33% by the private sector (more specifically, 30% legal entities and 3% by individuals).

On 21.05.2014, Piraeus Bank fully redeemed the total preference shares amounting €750mn to the Greek State in accordance with Law 3723/2008.

In conclusion, following the Bank’s share capital increase, by means of cash payment and contribution in kind in June 2013, the HFSF issued and granted “HFSF Warrants”, in accordance with Law 3864/2010, MCA 38/2012 and MCA 6/2013. Each Warrant gives the holder the right to purchase 4.47577327722 HFSF Shares. The valid issued Warrants at the date of the publication of this report were 843,637,022.

CUSTOMERAND SUPPLIERRELATIONSHIP


CUSTOMERAND SUPPLIERRELATIONSHIP

RELATIONSHIPS OF TRUST, TRANSPARENCY AND RESPONSIBILITY

Piraeus Bank’s fundamental principles regarding its relationship with its customers, are clearly provided information, transparency in contractual terms and security in all t

Documents

PIRAEUS BANK CORPORATE RESPONSIBILITY …/media/Com/2015/Files/...Athens, May 2015 The 2014 Corporate Responsibility Report of Piraeus Bank was printed on Munken Polar paper, obtained